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In today’s UK tax environment, the relationship between in-house tax teams and external advisers has become far more than a transactional arrangement. For Heads of Tax, it now plays a central role in governance, risk management, and how the organisation is perceived by HMRC.
HMRC’s approach to large businesses increasingly focuses on transparency, behavioural indicators, and real-time engagement. Its co-operative compliance framework makes clear that organisations are expected to maintain open dialogue, address issues promptly, and work collaboratively to resolve uncertainty.
Against this backdrop, external advisers are no longer just providers of technical input. They are an extension of the tax function itself and how they operate can directly influence risk ratings, audit outcomes, and reputational standing.
One of the most common pitfalls for in-house teams is treating advisers as a separate, external layer. In reality, UK regulation makes it clear that this distinction doesn’t hold from a governance perspective.
Under the Senior Accounting Officer (SAO) regime, businesses are required to demonstrate that their tax accounting arrangements are robust, well-controlled, and properly monitored—including any activities delegated to third parties.
This means that relying on advisers does not reduce accountability. Instead, it increases the need for structure. Strong relationships are built when advisers operate within clearly defined frameworks, where their input is visible, documented, and aligned with internal decision-making processes. Without this, organisations risk creating “black box” areas where decisions cannot easily be explained or defended.
At the heart of any effective adviser relationship is clarity. This starts with defining who owns decisions, how instructions are given, and where responsibility ultimately sits. In most UK organisations, this will involve a combination of the Head of Tax, the CFO, and, in more complex or sensitive matters, the Audit Committee.
This clarity also feeds into wider regulatory expectations. Large UK businesses are required to publish a tax strategy outlining their approach to governance, risk, and dealings with HMRC.
Advisers often contribute to shaping these narratives, but the in-house team must be able to stand behind them. That is only possible when there is a shared understanding of risk appetite, communication style, and escalation protocols.
Another defining feature of high-performing tax functions is deliberate adviser selection. Rather than defaulting to a single provider, they take a more strategic approach by matching the adviser to the nature of the work.
Large, complex, or cross-border projects may benefit from the scale and coordination of larger firms, while more specialised or contentious issues often require boutique expertise or specialist counsel. The goal is not to minimise the number of advisers, but to ensure that each one is used where they add the most value.
This approach also reduces dependency and introduces a healthy level of challenge, which is critical when dealing with high-risk or judgement-heavy areas of tax.
Strong relationships are not built on goodwill alone, they are sustained through consistent governance. This includes setting expectations around responsiveness, quality, and delivery, and then measuring performance against them.
Service levels and KPIs should not feel overly rigid or bureaucratic. Instead, they should act as a shared framework that ensures both sides understand what “good” looks like. UK procurement guidance reinforces this approach, highlighting the importance of clear performance measures throughout a supplier relationship.
When implemented well, this structure actually strengthens the relationship. It removes ambiguity, reduces friction, and creates a platform for continuous improvement.
One of the most significant shifts in recent years has been the move towards real-time engagement both with HMRC and within the broader tax ecosystem.
For Heads of Tax, this means moving away from retrospective problem-solving and towards proactive, ongoing dialogue. Advisers should be brought into discussions early, particularly where there is uncertainty or potential exposure. Regular touchpoints, clear briefing processes, and shared visibility of key issues all contribute to a more aligned and responsive relationship.
This way of working not only improves outcomes but also demonstrates the behaviours HMRC expects to see in low-risk businesses.
In the UK context, adviser relationships must also be viewed through the lens of independence and conflict management. This is particularly relevant where firms provide both audit and tax services.
The Financial Reporting Council’s Ethical Standard sets clear expectations around auditor independence and the provision of non-audit services.
For in-house teams, this means ensuring that conflicts are identified early, documented properly, and managed transparently. Failure to do so can undermine both the quality of advice and the organisation’s broader governance framework.
Ultimately, the value of an adviser relationship is not measured solely in cost, but in the quality and defensibility of the outcomes it produces.
Professional standards such as PCRT require advisers to provide advice that is lawful, well-reasoned, and properly documented.
For Heads of Tax, this translates into a simple but important expectation: advice should be something you can stand behind, explain, and defend—both internally and to HMRC.
At the same time, there is increasing pressure to balance quality with efficiency. Research shows that in-house tax teams place significant value on cost-effectiveness, specialist expertise, and responsiveness when working with external advisers.
The most successful relationships are those that deliver all three, without compromising on governance or control.
Building strong relationships with external advisers is not about increasing reliance—it is about increasing alignment.
For Heads of Tax in the UK, the goal is to create partnerships that are transparent, well-governed, and fully integrated into the organisation’s tax control framework. When this is achieved, advisers do more than provide answers. They help strengthen decision-making, support compliance, and ultimately improve how the business engages with HMRC.
See Tolley’s AI tools, developed for in-house professionals